May 7, 2010Marriage and Money Mindsets
MARRIAGE AND MONEY MINDSETS
By Cheryl Gochnauer
Danny and Tricia's combined income places them firmly in the upper middleclass, so most of us would assume their financial problems are over. Notso. Though they bring in a substantial amount each week, Danny and Triciahave never learned to effectively handle their resources.
Like many couples, Danny and Tricia don't keep close track of where theirmoney is going. They have separate accounts, since each respects theother's right to "their own money." Tricia likes not having to answer toDanny for every penny she spends. Unfortunately, she doesn't answer toherself for every penny she spends, either. Dollars flow into their threechecking accounts - hers, his and theirs -- then flow right out againwithout hanging around long enough to draw interest.
With all the activity in their accounts, Danny and Tricia figure they aredoing okay. Bills are usually paid on time, and when the checking accountbalances disappear, they always have their good credit to draw on. Whenthey receive their charge card statements each month, a fleeting discomfortsets in while reading the multiplying totals. But they've never had aproblem making the minimum payments. After all, two more checks are comingin next week.
At least, they assume so.
Tim and Rhonda make half of what Danny and Tricia bring home, and yet are inbetter financial shape. That's because they regularly do the math to seeexactly where they stand, money-wise, using a loose budget that guides theirspending decisions without hog-tying them emotionally.
Early in their marriage, Rhonda and Tim pledged to openly discuss all moneyissues. Together, they planned and identified mutual goals. They usecredit sparingly, and postpone big purchases until they can pay cash or atleast make significant down payments. That doesn't mean they don't enjoythe occasional financial fling. It's just that those sprees are plannedfor, not regretted in a resulting 21 percent APR after-glow.
Because they know where the funds are flowing, this couple knew exactlywhere they could cut when Rhonda decided to become a stay-at-home mom.Budget modifications were minor, since they had never delved into seriousdebt. Freedom from monetary strangleholds enabled them to make family, notfinance-, focused choices.
Tim and Rhonda understand the fundamental difference between "wants" and"needs". You can bet this young couple can visualize themselves in the sameluxury car their friends drive, and would savor the same 5-star meals andcostly vacations that launch Danny and Tricia's account balances into thestratosphere.
Sure, Tim would look great in that car. But the paid-off one he alreadydrives is dependable and economical. Yes, Rhonda needs a new outfit. Butis she really getting twice as much quality by spending $100 on that dress,instead of $50? And though a special meal is nice every once in a while,how often should they spend $40 for dinners they could fix at home for $7?
Free-spiritedly riding the financial wave from week to week is both riskyand restrictive. The most glaring potential peril is losing everything dueto an unforeseen layoff or illness. But it isn't a prospective catastrophethat poses the most danger to a couple's emotional bottom line. Instead,it's the strain accompanying financial uncertainty and consistently livingbeyond their means.
To positively approach marital money management:
Review finances together.
Agree on spending priorities.
Identify mutual goals.
Make a budget.
Regularly review the budget, tweaking it to reflect your currentsituation.
Stay in tune financially with your partner. It'll nurture the kind ofmoney-handling relationship you each want and need.
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Posted by Staff at 1:29 AM